An old boss, responding to a comment I made, said, “That is a blinding flash of the obvious.” Here's another: Turnover in sales and service is just too high in America's dealerships.
OK, what are we doing about it?
Fortunately for dealers. new employee-retention programs now are available to help slow down the revolving door at dealerships.
These tools are designed to help attract and retain higher-caliber sales people, keep good service technicians, and reduce hiring costs while delivering higher-quality employees more likely to stay put once on board.
Compensation also is part of turnover, but rarely the sole reason someone leaves one employer for another. (While compensation isn't discussed in this article, look for new sales compensation ideas in an upcoming issue.)
Industry turnover statistics are striking. In dealerships across the country, about 42,000 sales, 37,000 service, 7,000 managerial and 7,000 clerical and administrative positions are unfilled, according to Automotive Retailing Today (ART).
“The shortage of employees is due to sales growth and retiree replacement,” says Florida dealer Alan Starling, chairman of ART and a former NADA chairman.
There also have been misperceptions about the dealership work environment that keep dealerships off the hot list of desirable career paths, he says.
A new organization, Automotive Transformation Inc., believes another phenomenon is fueling the turnover problem.
“Recruiters have become more aggressive, eager to fill vacancies in all positions,” notes Jim Howell. “The result is more people changing jobs than we've seen over the past few years.”
He is president of AutoPersonnel.com, a franchised dealership staffing firm that has partnered with employee-retention consultant Roger Herman of The Herman Group to create Automotive Transformation.
Automotive Transformation consultants help dealerships diagnose the reasons for high turnover. (It often stems from the dealer and the culture he or she created).
The consultants work with management and employees to create a more stable workforce by trying to improve the work culture, leadership and other internal factors.
Herman says, “We've also discovered through research over the years that a determining factor in high turnover, regardless of the industry, is an employee's immediate supervisor.
“When supervisors are trained to realize — and held accountable — that employee retention is part of their job, turnover decreases. The whole idea here is to enable that dealership to attract and hold the best talent.”
Automotive Transformation has created and trademarked an “Employer of Choice” program. Among other things, it can help auto retailers who achieved high retention standards to use this identifier in advertising for new employees.
To attain this status, dealerships must achieve certain standards of excellence in criteria such as company culture, enlightened leadership, care of people, growth and opportunities for advancement, compensation and benefits.
AutoPersonnel.com focuses on staffing all dealership positions. A recruiter is placed in the participating dealer's store to handle the recruiting needs of that dealership.
Howell offers a professional recruiter who has been trained in employee staffing and retention, is familiar with the dealership's local market, and can focus exclusively on attracting, screening and hiring qualified people for vacant positions. Hurried managers often hire based on gut instinct and other unquantifiable traits.
“The idea is to take the fear out of working with a headhunter,” Howell says. “With this model, the dealer has a 90-day tryout option. The model works very similar to temporary-to-permanent structures. The dealer has an option at any time during the tryout period to place the employee on permanent status.”
A good place to make your hiring process more structured is with a process such as that offered by Wonderlic.
This Chicago-based company provides employee recruiting, assessment and retention solutions created specifically for the auto industry. Delivered on line, the process helps dealers better match candidate intelligence, problem-solving, ambition and personality traits as they compare to the requirements of the job to be filled.
“The NFL is a client of ours, and football makes a good analogy for what often happens in the dealership hiring process,” says Wendi Venable, national director for Wonderlic's automotive programs.
“When you don't test for an individual's cognitive ability and intelligence level as they relate to the requirements of the position on the field, you might hire a lineman for a quarterback's role. Linemen follow instructions; quarterbacks make things happen. Each position on the team — like in the dealership — has different skill sets it requires,” she says.
There are two main areas in which dealers should assess candidates.
First and foremost is intelligence (also referred to as cognitive ability or problem- solving skills). Venable says a 12-minute test can help a dealer determine whether a particular candidate can get a particular job done.
The second area of assessment gives an objective measurement of a candidate's core personality competencies. In other words, will the candidate get the job done?
Another test often recommended is one that measures the candidate's reliability on one hand, and likelihood of counter-productive work behavior on the other hand.
“For entry-level positions in a dealership, this is a great test for measuring things like likelihood of turnover. Past behavior is the single most effective predictor of future behavior,” Venable notes.
Such testing helps dealerships increase the odds of hiring better job-matched employees. Pre-hiring screening and testing can help slow down sales turnover by 30% to 40%, but not reduce it to zero, she says.
“Even when improved hiring processes are used, dealers must focus on creating that structured environment internally that fosters the kind of place of business people want to stay with for the long term,” she says.
5 Reasons Workers Leave
Automotive Transformation Inc. co-founder Roger Herman, in a book on employee retention, “Keeping Good People,” cites five principal reasons people leave a job and an employer:
- It doesn't feel good around here.
- They wouldn't miss me if I were gone.
- I don't get the support I need to get my job done.
- There's no opportunity for growth.
- They don't pay me a fair wage.
Here Are 2 More Important Reasons to Hire Well
Two more reasons to look at your hiring practices:
- It costs in total about $5,300 for advertising, background checks, drug screens and training when you hire a new sales associate. When new hires are placed on the floor to fend for themselves, losses of a bad hiring choice start adding up. Those include lost sales and poor customer perception, whether the sale is made or not.
- Improper hiring practices can put your dealership at risk of various Equal Employment Opportunity Commission compliance regulations and any resulting fines and negative public relations.